How is lease expense recognized for Card My Yard leases?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
will not provide an on-site evaluation for any proposed site before receiving all required information and materials required pursuant to Section III.A(2) below.
- (2) If you wish to operate your Card My Yard Business from a location that is not your primary residence, then before acquiring a site for the Card My Yard business, you must submit to us, in the form specified by us, a description of the site, evidence satisfactory to us demonstrating that the site satisfies our site selection guidelines, and such other information and materials as we may reasonably require,including, but notlimited to, a final, complete copy of the lease (which must incorporate a rider in substantially the form attached hereto as Exhibit F) or contract of sale for the site for your Card My Yard business. Such lease or contract for sale may not be signed by you unless it includes a rider in substantially the form attached hereto as Exhibit F and is submitted to, and approved by, us in advance.
- (3) We shall have fifteen (15) days after receiving all required site information to accept or reject, in our sole discretion, the proposed site as the location for your Card My Yard business. No site may be used for a Card My Yard business unless it is first accepted in writing by us, and you shall not make any binding commitment with respect to a site for your Card My Yard business unless the site is first accepted in writing by us. If we accept multiple sites for the Card My Yard business, you shall notify us in writing within five (5) days of the date of such acceptance of the site that you intend to acquire for the Card My Yard business. You acknowledge that our acceptance of a prospective site and the rendering of assistance in the selection of a site does not constitute a representation, promise, warranty or guarantee, express or implied, by us that the Card My Yard business operated at that site will be profitable or otherwise successful.
- (4) If you obtain rights to a site other than your home, then promptly following our acceptance of the site for your Card My Yard business, you shall acquire the site by purchase or lease, at your expense. You agree to furnish to us a copy of the executed lease or contract of sale within ten (10) days after execution.
- (5) After we accept the site and you acquire the site pursuant to this Agreement, the address of the site shall be entered on Exhibit C to this Agreement as the Franchise Location and the Protected Area around the Franchise Location will be described on Exhibit C.
- B. Franchise Location; Relocation. You have been granted the right to operate a Card My Yard business at the Franchise Location listed in Exhibit C to this Agreement. You must not relocate the Card My Yard business without our express prior written consent, except that our consent will not be required if your Franchise Location is your home and you move to a new residence within your Protected Area.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
The 2025 Card My Yard Franchise Disclosure Document (FDD) provides information regarding site selection and lease agreements but does not explicitly detail how lease expenses are recognized for accounting purposes. However, it does state that if a franchisee wishes to operate their Card My Yard business from a location that is not their primary residence, they must submit a description of the site, evidence that the site satisfies Card My Yard's site selection guidelines, and a final, complete copy of the lease, including a rider in the form attached as Exhibit F. This lease or contract for sale cannot be signed unless it includes the specified rider and is approved by Card My Yard in advance. Card My Yard has 15 days to accept or reject the proposed site. Franchisees are responsible for acquiring the site by purchase or lease at their own expense after the site is accepted. A copy of the executed lease or contract of sale must be furnished to Card My Yard within 10 days after execution.
Item 23 indicates that changes to the computer system may require the franchisee to incur costs to purchase, lease, and/or license new or modified computer hardware and/or software. It also states that Card My Yard cannot estimate the future costs of the Computer System (or additions or modifications thereto) and that the cost to the franchisee of obtaining the Computer System (including software licenses) or additions or modification thereto may not be fully amortizable over the remaining term of this Agreement.
Because the FDD does not specify the accounting treatment of lease expenses, prospective franchisees should seek clarification from Card My Yard regarding how these expenses should be recognized and accounted for. This includes understanding whether leases are treated as operating or finance leases and how this classification impacts the franchisee's financial statements. Additionally, franchisees should consult with a financial professional to ensure proper accounting practices are followed.